death spiral business definition
- The deteriorating financial condition and associated stock price of a cash-starved company that can raise capital only under the most onerous of terms. Restrictions and high interest charges on new capital cause the company to end up in an even worse financial position.
- The deteriorating financial condition of an insurance plan caused by changes in the plan's covered population. For example, a health insurance plan with few restrictions for applicants is likely to attract poor risks at the same time that healthy individuals look elsewhere.
- The financial condition of a debtor who must borrow additional funds in order to meet interest obligations on existing debt.
Learn more about death spiral